In an effort to boost earnings, BASF is cutting its annual dividend and is considering shedding noncore assets like its agricultural chemicals business, The Wall Street Journal reports.
The German chemical giant’s new strategy focuses on lower investments and cost savings in an effort to boost earnings and cash generation over the next four years. Weak demand coupled with high expenses have taken a toll on the company’s profitability in recent quarters.
BASF’s earnings have fallen as economic growth slowed in China and Europe while at the same time the company was trying to overcome the hit from Russia’s invasion of Ukraine, which triggered big swings in energy and raw-material costs and forced it to book big write-downs on its assets in Russia.
Five months into the job, new CEO Markus Kamieth on Thursday laid out BASF’s plans to tighten its focus on its core operations. He says the company will look at options for businesses it considers noncore, which include its battery materials, coatings and environmental catalyst, and metal solutions segments as well as its agricultural unit.
BASF completed its capacity expansion for key specialty compounds manufactured at its Geismar plant last year. The project was part of a series of several capacity expansion projects, totaling nearly $1 billion, that began at the Geismar plant in 2018.
